Utility intends to buy turbine as part of an expansion plan

Assignment Help Operation Management

Reference no: EM131789820

A public utility intends to buy a turbine as part of an expansion plan and must now decide on the number of spare parts to order. One part, no.X135, can be purchased for $100 each. Additional carrying costs of each spare part is estimated to be $145 dollars over the life of the turbine. Un-used spare part has no salvage value. A stockout would cost roughly $8000 due to downtime, order, and special purchase factors. Historical records based on the performance of similar equipment operating under similar conditions suggest that demand for spare parts will approximate the distribution listed in the table below (non-normal). a. What is the optimal number of spares to order? b. What is the actual service level as a result of a?

Reference no: EM131789820

Questions Cloud

Prepare the appropriate journal entry to record compensation : On January 1, 2011, options were granted for 40 million $1 par common shares. Prepare the appropriate journal entry to record compensation expense

Leader situational control be considered highest : In which of the following situations would a leader's situational control be considered highest?

Determine the economic order quantity : Determine the economic order quantity. Determine the annual cost savings if the shop change from an order size of 15 units to the economic order quantity.

Analyze the impact on the financial statements : Prepare a flowchart which demonstrates how accural accounting and cash flows are linked for a merchandise sale. Analyze the impact on the financial statements

Utility intends to buy turbine as part of an expansion plan : A public utility intends to buy a turbine as part of an expansion plan and must now decide on the number of spare parts to order.

Determine the total compensation cost pertaining : SSG Cycles manufactures and distributes motorcycle parts and supplies. Determine the total compensation cost pertaining to the incentive stock option plan

Draw a graph of the monopolist demand curve : Draw a graph of the monopolist's demand curve, short-run marginal cost curve and marginal revenue curve and determine the profit-maximizing price and quantity.

Compute carmen companys earnings : Weighted average shares outstanding to solve for the basic EPS. the the information and compute Carmen company's earnings per share for the year ended December

Estimate the price elasticity of demand for alcohol products : Assume the government wishes to reduce alcohol consumption by considering a higher excise tax on alcohol products. Collect information on estimates.

User Account

All Pages